Maximum possible loss (MPL)/maximum foreseeable loss (MFL)

The largest possible loss that could occur given the worst combination of circumstances. Under a fire policy the worst case scenario would be a fire in circumstances where the automatic sprinklers and fire extinguishers failed, and the fire brigade came late to the scene. A further coincidence might be a fully stocked warehouse containing high value combustible goods. Compare with estimated maximum loss (EML).

Leave a Reply

Your email address will not be published. Required fields are marked *